Since federal regulators began reinterpreting the United States’ position on marijuana in 2014, the number of state-sanctioned marijuana-related businesses (MRBs) has exploded, leaving MRBs with an abundance of cash, but not many places to deposit it. The New Jersey Department of Health approved six alternative treatment centers (ATCs), which pro-vide qualifying patients with medicinal marijuana and related paraphernalia. These ATCs are a type of MRB. On July 16 of this year, the department released a request for applications (RFA) for up to six additional ATCs. The department expects to release future RFAs this fall and in the winter of 2019.
This year’s forecast for nationwide sales of state-sanctioned marijuana is estimated to be $11 billion.1 However, the vast majority of the United States’ financial services industry has declined to enter the MRB market due to uncertainties in state and federal marijuana laws, rules, regulations, and policies. While it is undisputed that the mechanisms for harmonizing jurisdictional treatment of marijuana are incomplete, banks and credit unions may utilize certain tools to mitigate the risk of serving MRBs. Financial institutions seeking to serve MRBs must implement enhanced risk assessment and customer due diligence.